TL;DR
Swipe’s native SXP token fulfills several use cases in Swipe’s payment ecosystem. Holders of the token can enjoy multiple benefits, ranging from paying for transaction fees to staking and getting discounts on the Swipe platform.
Introduction
As part of the growing Decentralized Finance (DeFi) ecosystem, Swipe provides a wide variety of products and services to its users. Swipe's Visa debit card and multi-asset DeFi App allow you to instantly convert between cryptocurrencies, fiat currencies, and stablecoins.
As of December 2020, the app supports four stablecoins (USDT, USDC, BUSD, and DAI) and two fiat currencies (USD and EUR). Swipe's Visa debit card service is currently available in Europe, and the US debit card is coming soon.
All of Swipe's products are enhanced by the native SXP token, which serves as a decentralized digital currency. This native digital currency serves multiple uses in the Swipe ecosystem. Several of them relate to awarding token holders, while it's also subject to a reducing supply over time through coin burns.
What is Swipe Token (SXP)?
While many DeFi tokens are considered to be speculative in nature, SXP primarily serves as a utility token. It powers the entire Swipe ecosystem. By providing utility to token holders, there are multiple incentives to either use or hold SXP.
One core aspect of the Swipe ecosystem is its Visa debit card. It isn’t the first nor the only cryptocurrency debit card in existence. However, unlike similar projects, users don’t need to stake SXP to be able to use the debit card service.
There are a few different versions of the Swipe debit card. While holding SXP is not a requirement, SXP token holders are able to obtain the higher-tier cards. The high-tier cards include benefits, such as subscriptions to Netflix or Spotify, no foreign transaction fees, and discounts through Starbucks, Uber, Apple Music, and Airbnb.
Which benefits are accessible depends on your current SXP holdings staked in the native mobile application. If you’d like to get more information on the different debit card tiers, check out this page.
How to store Swipe Token (SXP)
Like most other DeFi projects on the crypto market today, Swipe doesn't have a native blockchain. Instead, the team decided to issue the SXP tokens on both Ethereum and BNB Chain.
The Swipe Token (SXP) is available both as an ERC-20 token (on Ethereum) and as a BEP-20 token (on the BNB Smart Chain). As such, you can easily store SXP in any crypto wallet that supports ERC-20 or BEP-20 tokens (e.g., Trust Wallet, MetaMask).
SXP supply and issuance
Swipe’s team decided to cap the max supply of SXP at 300 million tokens. However, coin burns will gradually decrease the total supply until there are 100 million tokens left.
A portion of the total supply is distributed to SXP users worldwide. In addition, the supply changes regularly, as outlined below:
600,000 SXP is allocated for company operations every month.
10,000,000 SXP is made available every year for the Swipe team and founders.
1,200,000 SXP is made available every month for ecosystem rewards, including staking and other incentives.
Based on those figures, it would appear as if the circulating supply of SXP would be increasing until the max supply is reached. That isn’t the case, as the developers opted to make SXP a deflationary asset. Tokens will be destroyed through coin burns as network usage increases.
To be more specific, 80% of the transaction fees on the Swipe network will be destroyed by the smart contract. The remaining 20% of the fees will remain a part of the ecosystem. According to the team, this amount will eventually be distributed among network validators, as they’ll earn SXP for providing valuable services to the network.
As mentioned, the token burns will continue until a total supply of 100,000,000 SXP is reached. From that point forward, there will be no further reduction in the supply. All fees collected by the network will then be distributed among network validators.
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What is SXP used for?
The first use comes in the form of payments. The SXP asset is well-suited to pay at over 60 million locations worldwide. This is possible through merchants who accept cryptocurrency or the Swipe Visa card. In terms of transactions, SXP can be moved on both Ethereum and BNB Chain, which makes it a powerful asset for peer-to-peer transactions.
The second benefit is that holders can get various discounts on fees. Holders of SXP can use their tokens to cover transaction fees on the Swipe network, including transfers made through the Swipe Wallet and Swipe Visa Card.
Another use case comes when using the Swipe Visa debit card. With its four different tiers, there are incentives to hold or acquire SXP. The larger the holding, the higher the card tier.
Holding SXP can introduce extra benefits to cardholders, including shopping discounts and free subscriptions to popular streaming services. Users who stake 30,000 SXP for six months will also be eligible for a cashback of 8% on all purchases and other extra perks.
Users that do staking can also get SXP rewards in exchange for their contribution in securing the network. Last but not least, holders of SXP will be able to participate in network governance, creating proposals, and voting for protocol changes affecting the Swipe network.
Closing thoughts
The Swipe ecosystem includes many different products and services, all of which use the SXP token in one way or another. With its Visa debit card, Swipe is attempting to make cryptocurrencies more useful and accessible to the everyday person.
Combined with the deflationary model of this token, there are multiple reasons to take a closer look at the whitepaper and keep an eye on how this project will evolve.